BTI 2008 | Madagascar Country Report
Total Page:16
File Type:pdf, Size:1020Kb
BTI 2008 | Madagascar Country Report Status Index 1-10 6.23 # 45 of 125 Democracy 1-10 7.45 # 33 of 125 Market Economy 1-10 5.00 # 78 of 125 Management Index 1-10 6.23 # 26 of 125 scale: 1 (lowest) to 10 (highest) score rank trend This report is part of the Bertelsmann Transformation Index (BTI) 2008. The BTI is a global ranking of transition processes in which the state of democracy and market economic systems as well as the quality of political management in 125 transformation and developing countries are evaluated. The BTI is a joint project of the Bertelsmann Stiftung and the Center for Applied Policy Research (C•A•P) at Munich University. More on the BTI at http://www.bertelsmann-transformation-index.de/ Please cite as follows: Bertelsmann Stiftung, BTI 2008 — Madagascar Country Report. Gütersloh: Bertelsmann Stiftung, 2007. © 2007 Bertelsmann Stiftung, Gütersloh BTI 2008 | Madagascar 2 Key Indicators Population mn. 18.6 HDI 0.51 GDP p.c. $ 821 Pop. growth1 % p.a. 2.7 HDI rank of 177 143 Gini Index 47.5 Life expectancy years 56 UN Education Index 0.66 Poverty3 % 85.1 Urban population % 26.8 Gender equality2 - Aid per capita $ 49.9 Sources: UNDP, Human Development Report 2006 | The World Bank, World Development Indicators 2007 | OECD Development Assistance Committee 2006. Footnotes: (1) Average annual growth rate 1990-2005. (2) Gender Empowerment Measure (GEM). (3) Percentage of population living on less than $2 a day. Executive Summary President Marc Ravalomanana’s re-election on 3 December 2006 with a strong majority (54.8%) points to a mandate for his continued efforts at modernizing Madagascar politically, economically and socially during the period under review. Supported by a comfortable parliamentary majority in the National Assembly of about 80% and a slightly slimmer two-thirds majority of the old AREMA-network in the second chamber, the Senate, Ravalomanana was able to continue his modernization approach in terms of both political and economic development. In terms of overall growth, shortcomings persist in the areas of infrastructure, education and health. Though schools and classrooms have been built to mitigate some of the quantitative bottlenecks in enrolling students, newly recruited teachers are poorly trained, which engenders a quality problem in education. Access to health services is difficult for the poor and often available only upon payment of bribery. Macroeconomic have yet to yield a tangible effect for the extremely poor and the poor middle class. Nevertheless, the majority of Malagasy society sees no evident alternative to Ravalomanana’s approach, all competing candidates from the left, right and center alike have found little favor with voters. Ravalomanana continued to overhaul Malagasy society in structural terms with ongoing efforts directed toward institution building, combating corruption, fighting AIDS, and inviting international capital, investors, grants and donors to accelerate the developmental effort. In order to coordinate the projects initiated under the auspices of multiple international donors – including the World Bank, UNDP, European Union and other bilateral aid – Ravalomanana designed a strategic roadmap for his second mandate, the “Madagascar Naturellement” (Madagascar Action Plan). This plan has also facilitated the implementation of conservation efforts according to the targets of the UN Millennium Development Goals. BTI 2008 | Madagascar 3 With respect to private economic activity, development has been slower than anticipated. Private ownership facilities, regional integration, tax grants, and the one- stop-approach to foreign investors have not produced the results anticipated by the government. Increasing oil prices and a global surge in shipping tariffs due to China’s demand and competition have had an impact on the traditional de-localization pattern of internationally active companies. Therefore, the strategies that were successful in promoting development over the last decade might not be the same as those in the decades to come. History and Characteristics of Transformation Transformation in Madagascar has been disparate, asynchronous and haltingly pursued. The building blocks for a market-oriented and democratic order were laid under the semi-authoritarian government of President Philibert Tsiranana (1960 – 1972) following independence. These foundations were, however, conditioned by a post- colonial “Communauté Française” framework that extended civil liberties to a socially and economically assimilated French speaking elite and was characterized by economic transactions that were massively biased by oligopolistic and monopolistic elements. The country’s democratic transformation did not begin in any meaningful sense of the term until the end of the 1980s. Transformation was facilitated by Ratsiraka’s fall in 1991 and subsequent constitutional change. This in turn created the Third Republic, which provided for a democratically elected government under President Albert Zafy, a heart surgeon elected in 1993. Ratsiraka’s disastrous economic management, which was characterized by high investment in state enterprises, the misallocation of funding, and increased indebtedness, had led to a peoples’ movement (“forces vives”) composed of clergymen, trade unionists, intellectuals and entrepreneurs. By way of long strikes, civil disobedience and demonstrations from 1988 to 1991, this movement undermined the authority of the state party AREMA until Ratsiraka’s army fired on protesters and youths, which prompted the end of his rule. The Zafy Administration was, however, proved unstable and not able to face the challenges of economic and social modernization. It struggled with changing majorities in parliament and was finally toppled by an impeachment process. The presidential elections in December 1996 swept Ratsiraka back into office, albeit with results of dubious integrity. During his second term, Ratsiraka worked to decentralize government, introducing a territorial re- organization in six “Autonomous Provinces.” The country remained far from having achieved the goals of market economic transformation. A middle-income country from its colonial era through the 1960s, Madagascar underwent a process of de-industrialization from 1972 onwards, eventually becoming a “highly indebted less-developed country.” From 1972 to 1975, Madagascar dissociated BTI 2008 | Madagascar 4 itself from global developments. French citizens’ were expropriated of their land and large swaths of domestic and international economic activities were collectivized. The large enterprises were taken over by the government and managed in an economically unsound manner; investments were guided by political considerations, in part with the consent of the World Bank. In “virtual industrial estates,” the government sponsored an “administrative personnel machinery,” but there was no production or value added by these ventures. Instead, all sectors – including agriculture, transport, public utilities, and commerce – were run according to the Soviet model. The transition to democracy was initiated in 1988 under pressure from the IMF and World Bank, when Madagascar had to announce its encumbrance and supply collapsed. The IMF negotiated a sequence of structural adjustment programs with the Malagasy government. The Ratsiraka government initiated reforms hesitantly, as they ran counter to its doctrine. As is often the case with this sort of transformation, the reforms did not yield the anticipated benefits, at least in the short term. Whereas the state of social welfare, as indicated by income levels, nutrition, health, education and employment suffered erosion, there were some observable gains in macroeconomic terms as inflation and public debt were reduced and the exchange rate was stabilized, which stimulated growth. Following these setbacks, everyone – citizens, international donors, and states alike – attached high expectations to Ravalomanana’s reform initiatives and his prime minister, Jacques Sylla. Ravalomanana’s “Madagascar Naturellement,” or, Madagascar Action Plan, integrated economic and sociopolitical aspects of transformation, both of which he saw as being associated with the “transversal task” of environmental sustainability. According to Ravalomanana, there will be no real economic progress unless citizens and economic subjects live within transparent political conditions that are conducive to economic progress and growth. Social conditions such as education, health, effective state and good governance are as important as purely economic issues such as access to credit, private property guarantees, access to the market, low taxes or a competitive environment. Currently, at the beginning of Ravalomanana’s second mandate, the balance of successes and failures of his government is equally mixed. BTI 2008 | Madagascar 5 Transformation Status I. Democracy 1 | Stateness Problems of state identity do not exist in Madagascar. There is a respected Monopoly on the monopoly on the use of force. There are, however, isolated cases in marginally use of force settled areas of the south (in the savannah) and in some parts of the primary rain forest patches where there is no state presence, but where – at the same time - the state’s authority is not questioned. The definition of citizenship and who qualifies as a Malagasy are not issues. All State identity citizens have the same citizenship rights, reinforced by the integrative effect of one single state language – Malagasy – which has been codified in a written